Piaggio Group: 2019 half-year financial statements

Jul 26 2019 12:37
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In the first half of 2019, the Piaggio Group reported a significant improvement in performance from the year-earlier period, growth in all the main earnings indicators, an increase in net profit, higher capital expenditure and a reduction in debt.

 

Consolidated net sales 817 million euro, up 12% (729.6 €/mln at 30.06.2018)

 

Industrial gross margin 250 million euro, up 9.5%

(228,3 €/mln in H1 2018), 30.6% return on net sales

 

Ebitda 134.3 million euro, up 15.2% (130.6 €/mln ex IFRS 16)
(116.6 €/mln in H1 2018). Ebitda margin 16.4%
(16% in H1 2018)

 

Ebit 75.1 million euro, up 21.3%
(74.8 €/mln ex IFRS 16) (61.9 €/mln at 30.06.2018). Ebit margin 9.2% (8.5% in H1 2018)

 

Profit before tax 62.8 million euro, up 29.5% (48.5 €/mln in H1 2018)

 

Net profit 34.6 million euro, up 29.6% (26.7 €/mln at 30.06.2018)

 

Net financial position ex IFRS 16 -398 €/mln, an improvement of 33.4 €/mln from
-431.4 €/mln at 30.06.2018 and 31.2 €/mln from -429.2 €/mln at 31.12.2018

 

NFP, including IFRS 16, -418 €/mln, an improvement of 13.3 €/mln
from 30.06.2018 and 11.2 €/mln from 31.12.2018

 

321,500 vehicles shipped worldwide, up by 5.7% (304,000 in H1 2018)

 

Capital expenditure 60.4 million euro, up 26.5% (47.8 €/mln in H1 2018)

 

2019 interim dividend of 5.5 eurocents per ordinary share
(9 eurocents per share for the whole 2018 financial year)

 

 

Pontedera, 26 July 2019 – At a meeting today chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. (PIA.MI) examined and approved the half-year report on operations as at and for the six months to 30 June 2019.

 

Piaggio Group business and financial performance at 30 June 2019 (1)

Group consolidated net sales totalled 817 million euro, an improvement of 12% from 729.6 million euro in the first half of 2018 (+10.7% at constant exchange rates).

The industrial gross margin was 250 million euro, up by 9.5% from 228.3 million euro at 30 June 2018. The return on net sales was 30.6% (31.3% in the year-earlier period), 30.8% at constant exchange rates. 

The changes in the income statement described above generated consolidated Ebitda of 134.3 million euro, up by 15.2% (+15% at constant exchange rates) from 116.6 million euro in the first half of 2018.

The Ebitda margin was 16.4%, the highest first-half result since 2006 (IPO date) (16% in the first half of 2018).

Excluding the effects of IFRS 16, Ebitda at 30 June 2019 would have been 130.6 million euro.

Ebit amounted to 75.1 million euro, an improvement of 21.3% from 61.9 million euro in the first half of 2018. The Ebit margin was 9.2% (8.5% at 30 June 2018). Excluding the effects of IFRS 16, Ebit would have been 74.8 million euro.

Profit before tax in the first half was 62.8 million euro, an increase of 29.5% from 48.5 million euro in the year-earlier period. Income tax for the six months was 28.3 million euro, with an impact on pre-tax profit of 45%.

Piaggio Group net profit for the first half to 30 June 2019 was 34.6 million euro, an increase of 29.6% from 26.7 million euro in the year-earlier period.

Excluding the negative effects of 20 million euro from application of IFRS 16, net financial debt was 398 million euro, an improvement of 33.4 million euro from 431.4 million euro at 30 June 2018 and an improvement of 31.2 million euro from 429.2 million euro at 31 December 2018.

Considering application of IFRS 16, the net financial position at 30 June 2019 was 418 million euro, an improvement of 13.3 million euro from 30 June 2018 and of 11.2 million euro from 31 December 2018.

Group shareholders' equity at 30 June 2019 was 393.7 million euro, an increase of 1.7 million euro from 31 December 2018.

In the first half, Piaggio Group capital expenditure amounted to 60.4 million euro, an increase of 26.5 % from 47.8 million euro in the first half of 2018.

Business performance in the six months to 30 June 2019

In the first six months of 2019, the Piaggio Group sold 321,500 vehicles worldwide, an increase of 5.7% (304,000 shipments in the year-earlier period), and reported consolidated net sales of 817 million euro.

During the period, the Group reported growth in sales volumes in all regions, with a particularly strong increase in Asia Pacific on two-wheelers (+20.2%), followed by the EMEA and Americas area (+6.7%) and India (+0.5%).

 

Two-wheelers:

In the first six months of 2019, the Group sold 215,900 two-wheelers worldwide, an improvement of 5.9% (203,900 in the first half of 2018), generating net sales of 583.4 million euro (+12.1% from 520.5 million euro in the year-earlier period).

The figure includes spares and accessories, on which turnover totalled 67.5 million euro, an increase of 5%.

In the first half of 2019, the Piaggio Group reported excellent performance in the Asia Pacific region (+20.2% volumes, +28.8% turnover) and the EMEA and Americas area (+4.6% volumes, +9.4% turnover). In India two-wheeler turnover rose by 2.3%, partly thanks to an improved sales mix.

In Europe the Piaggio Group confirmed its leadership of the scooter segment, with a share of 24.4%; on the North American scooter market it maintained a strong position, with a share of 21.3%.

The scooter segment had a very positive first half, with double-digit turnover growth, driven primarily by the Vespa brand (which reported a 16% increase in turnover from the first half of 2018) and by the excellent performance of the Piaggio Mp3 three-wheel scooter, which boosted turnover by more than 20 percentage points, and of Aprilia scooters.

The Group motorcycle segment also boosted first-half revenue by 14%, largely thanks to the performance of the Moto Guzzi brand, which achieved a significant sales increase, generated in particular by the excellent results of the new Moto Guzzi V85TT, the all-terrain model that has enjoyed great success since it began shipping in February.

 

Commercial vehicles:

In commercial vehicles, the Piaggio Group reported sales volumes of 105,700 vehicles, up 5.5% from 100,100 vehicles in the first half of 2018, and net sales of 233.5 million euro, up +11.7% from 209.1 million euro in the year-earlier period.         
The figure includes spares and accessories, where sales totalled 26.1 million euro, up 9.9%.

At geographical level, the strongest growth was reported in the EMEA and Americas area (+45.5% volumes; +18.6% turnover). In India, the Piaggio Group sold 95,800 commercial vehicles (+2.6% volumes; +9.8% turnover); the PVPL subsidiary had an overall three-wheeler market share of 24.8% and confirmed its leadership of the cargo segment, with a share of 44.3%.

The PVPL production facility exported 19,300 vehicles in the first half of 2019.

 

Piaggio Fast Forward:

Piaggio Fast Forward (PFF), the Piaggio Group company headquartered in Boston and active in robotics and mobility for the future, is continuing development work on its first innovative project, Gita, which will be assembled and produced at the new facility in Charlestown.

 

 

Significant events in and after the first six months of 2019

Supplementing the information published above and at the time of approval of the 2019 first-quarter results (directors’ meeting of 07 May 2019), this section illustrates key events in and after 2018.

On 28 June 2019, the Extraordinary Shareholders’ Meeting of Piaggio & C. S.p.A. examined and approved the proposed amendments to articles 5, 7, 8, 12 and 27 of the Articles of Association.

On 4 July 2019, the European Investment Bank (EIB) and the Piaggio Group (PIA.MI) signed a 7-year 70 million euro finance contract to fund the research and development projects set out in the investment plan, to be conducted at the Piaggio Group's Italian sites over the three-year period 2019-2021.

 

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Outlook

In a context in which the Piaggio Group is strengthening its position on the global markets, the Group is committed to:

  • confirming its leadership position on the European two-wheeler market, taking full advantage of the expected recovery by further strengthening its scooter and motorcycle range;
  • maintaining its current positions on the European commercial vehicles market by strengthening the sales network;
  • consolidating its presence in Asia Pacific, by exploring new opportunities in countries in the region, with a particular focus on the premium segment of the market;
  • increasing sales on the Indian scooter market thanks to the Vespa and Aprilia offers;
  • growing the penetration of commercial vehicles in India, in part through the introduction of new engine displacements.

From the technological viewpoint, the Piaggio Group will continue research on new solutions to current and future mobility problems, through the work of Piaggio Fast Forward (Boston) and new advances in design at the PADc (Piaggio Advanced Design center) in Pasadena.

At a more general level, the Group maintains its commitment – a characteristic of recent years and continuing in 2019 – to generate higher productivity through close attention to cost and investment efficiency, in compliance with its ethical principles.

 

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Piaggio & C. S.p.A.

Interim dividend

 

At today’s meeting, the Board of Directors also approved a new dividend payout policy focused on payment of interim dividends (rather than a single payout). This will bring the company into line with other international players in the two-wheeler industry, and also optimise cash flow management given the seasonal nature of the Group's business.

Consequently, after approving the financial statements as at and for the six months to 30 June 2019 and the Directors’ Report pursuant to art. 2344-bis of the Italian Civil Code, the Board of Directors approved payment of an interim dividend for financial year 2019 of 5.5 eurocents, gross of tax, to each entitled ordinary share (compared with a dividend of 9 eurocents per share for the whole 2018 financial year), for an amount totalling Euro 19,650,390.43.

The ex dividend date (coupon 13) is 23 September 2019; the record date is 24 September 2019 and the payment date is 25 September 2019.

The Financial Statements, the Directors’ Report and the Opinion of the Independent Auditors pursuant to art. 2433-bis of the Italian Civil Code will be available for shareholders at the company's registered offices (Viale Rinaldo Piaggio 25, Pontedera - Pisa).

 

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Conference call with analysts

The presentation of the financial results as at and for the first half ended 30 June 2019, which will be illustrated during a conference call with financial analysts, is available on the corporate website at www.piaggiogroup.com/it/investor.

(1) The main alternative performance indicators used by the Piaggio Group, representing the data monitored by management, are as follows:

  • EBITDA: earnings (EBIT) before amortisation and depreciation and impairment losses on property, plant and equipment, intangible assets, and rights of use, as reflected in the consolidated income statement;
  • Industrial gross margin: net sales less costs to sell;
  • Net financial position: gross financial debt less cash and cash equivalents, and other current financial receivables. Determination of the net financial position does not include other financial assets and liabilities arising from measurement at fair value, derivatives designated or not as hedges, fair value adjustments of the related hedged items and related accruals.
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